Health and Human Services proposed new regulations

By Kelly Kennedy, USA TODAYApril 2, 2011

Health and Human Services proposed new regulations Thursday it hopes will reduce Medicare costs and improve care by focusing funds on prevention and quality, rather than the number of times a patient sees a doctor.
Affordable care organizations could save Medicare $960 million over the next three years, Health and Human Services Secretary Kathleen Sebelius said. She emphasized the need for preventive care, saying that 1 in 5 Medicare patients who make a visit to the hospital are back within 30 days, and that 1 in 7 suffer a harmful mistake. An additional 100,000 patients die from infections every year.

"These results are unacceptable," she said.

Under the proposed system, which would begin in 2012, hospitals and other medical facilities serving more than 5,000 Medicare patients could form teams of primary care doctors, nurse practitioners and specialists to coordinate a patient's care. The patient would still be able to choose his own doctor, and the system is voluntary. The regulation comes as part of the federal health care law, but is open for public comment before it is finalized later this year.

Half of Medicare beneficiaries have more than one chronic condition and often receive care from several doctors, according to Health and Human Services. If doctors don't talk to each other, they can make mistakes in prescribing medications that shouldn't be taken with the patient's other prescriptions, or could administer care or tests the patient has already received.

"It describes what we've been up to for 10 years," said Steve Safyer, president of Montefiore Medical Center in New York City. "It really is what people are moving toward."

Safyer said coordinated care emphasizes quality and safety, and at his hospital, it means going out to visit elderly patients who live in four-story walk-ups in the Bronx, or making sure patients can get all of their care in one place. One doctor takes charge of each patient's care, while a team nurse coordinates appointments. The care manager makes sure a patient knows what to avoid with his heart-disease medications, as well as calling to ensure a diabetic patient has her blood sugar under control. "From a financial point of view, 80% of our payments are Medicare and Medicaid," he said. "This is the only system, in my mind, that can manage the expense."

The organizations would be eligible for bonuses if they improve the quality of their care and reduce wasteful practices. But there's some risk: The government will create a benchmark that each organization must reach to assess whether it will receive a bonus from the savings created, or repay shared losses. Mike Nugent, co-author of "Accountable Care Organizations: Your Guide to Strategy, Design, and Implementation," said there are at least 50 affordable care organization projects being considered across the country. A small number do it because of the shared-savings aspect of the plan, he said, but more do it because they need to cut costs.

"The bigger issue is that [Medicare] reimbursement is not going to increase as it has in the past," he said. In the past, Medicare payments have increased about 3% every year, but now those payments will be capped, and doctors will have to cut costs to keep their services competitive. "Competition preempts reform. Competition preempts these regulations."